What Guarantees the success of a Startup?
Investing in a startup is a tricky, complex endeavor, no one expects an easy road ahead when they decide to take the risk, and commit hard-earned cash to a promising and bold project. Not every new business idea has guaranteed success. And sadly, startup success is just one out of ten.
The first year can be both exciting and draining, the best you can do is stay calm, your mind open and your eyes clear. Or better yet, you can learn some handy facts based on years of experience and statistical analysis by which a startup can greatly reduce risk of investment.
What makes or breaks a project is usually set in the beginning, so during your valuation process you can spot pretty easily some aspects of a venture that determine whether its dead-on-arrival or if it actually has some hope of survival.
For starters, any project worth its salt must have a solid business idea. This is when you compare it to the market reality and see how it holds up. In order for a new venture to be successful, it has to solve a fundamental widespread problem, fulfill a need or offer something new to the market.
So, does this idea have the potential to succeed? Well, if there’s a need for the products/services, the target audience has an attractive size and without significant potential competition or anyone else offering anything similar is usually a good sign.
What all this means is that not only the product or the idea has to check out, but also, the industry has to be right. Innovative ones and currently well-performing are the preferred environment for a startup high success rate. In summary, industry evaluation is also fundamental and industries showing potential for economic growth frequently go hand in hand with innovative breakthroughs.
If the startup you’re considering has a business idea that actually advances innovation in said industry and that drives momentum, it can have increased potential for big profits all around. However, all of that depends on how big of an innovation it’s really being offered. An innovation structured to reach global markets with massive adoption potential for a product that increases return projections during the right time within the business’s industry, can be a deciding factor to support a startup.
To add on this, not only do you have to consider how big of an innovation it really is, but also how much an innovation. A game-changer, a disruptive product or service that’s unseen and hard to replicate, offering customer something truly new, useful and effective that makes them embrace a new way of life.
Finding something like this in an investment can be incredibly hard, and even when you find it, all of it can mean nothing if the project doesn’t compensate its business idea with the right business plan. A must-have for startups.
There are different business plans for different projects and they generally need to be long and thorough, but they must provide you the clarity of the venture’s goals and the process of achieving them. No matter what, any project must have a blueprint to guide the venture from its start-up phase, through establishment and finally the business growth phase. No business idea becomes a reality without it.
And speaking of reality, on this business plan, numbers have to be real. They have to make sense. From an awareness of their funding options, whether is financing, business loans, grants, angel investors, or crowdfunding for setting up the capital needed, to setting a projected yearly budget plan. An estimate of the one-time startup costs including market research, equipment, legal fees, insurance, trademarking, branding, inventory, opening events, leases, licenses, permits, etc., and all expenses needed to keep the business going for at least one year, like rent, utilities, advertising, production, supplies, travel expenses, salaries, etc.
All of these expenses, investment amounts, return projections have to be coherent with the production costs, the market, the industry growth potential, the tax estimations based on the type of business entity, potential licensing and permits, accounting systems, location and required infrastructure. They need to make sense and be airtight on the spending side and the profit side as well.
For the spending side to make sense is easy, if the planning is sound, thorough and committed, the numbers will be solid.
For the profit side to make sense, not only a business plan is needed, a sound marketing plan that understand the intended target audience and the industry is also paramount. One would argue it’s fundamental even on the capital raise stages of any project; and when it’s well realized and thought out, even on this phase, it’s a sign that the team understands a lot of what can make their vision truly viable.
Knowing how to effectively promote a project’s ideas with an unique selling, or even an investment proposition, guarantees that the team behind it is knowledgeable about all the factors that surrounds their venture.
Which brings us to the last, most important and most influential factor behind every startup ever existed; the people behind it.
Get to know the team behind an investment that really draws your attention and make sure that is formed by experts with significant track record, but that also has on its ranks, young fresh talent with bold ideas. A dream-team is one that’s composed by proactive, passionate, persevering, open people with a grand vision and are aware of each’s importance and role within the project. This kind of team usually comes with a healthy dose of know-how that helps traverse the familiar roads of company founding ventures and that’s also capable to shape adaptive, changing projects that mold themselves to better overcome whatever hurdles their current business stages throw at them.
From all that you’ve read so far it must seem to you that the only thing guaranteeing success for a startup investment is utopic, and if we aim to be objective, it’s really hard to find an opportunity that lines up all its beats the right way.
There’s a lot to think about and a surefire, easy to spot successful investment opportunity doesn’t come by knocking on your door every day. It can sometimes seem like a slow crawl and endless analyzing of possible candidates without a light at the end of the tunnel.
But there is hope, many emergent markets in the financial sector are giving birth to disruptive and compelling industries set to change business landscape is innovative ways. Is in these types of markets where you’ll frequently find the kind of visionaries that can actually back their ambitions and make them a reality.
You can find one such team in a very promising startup consortium for the Fintech sector; a consortium that’s making huge steps to alleviate and mitigate a lot of the limitation of the current banking, trading and remittance market world to effectively advance the landscape in a worldwide spectrum with groundbreaking applications and new technologies such as blockchain integration.
This one company is aimed to redesign the financial world through a differentiated and innovative new asset class with intrinsic value, integrated within a crowdfunding, trading and banking ecosystem. A new asset class that also acts as a transaction tool and at the same time as an investment instrument with liquidity.
Like you read earlier “a surefire, easy to spot successful investment opportunity doesn’t come by knocking on your door every day”. So, when something so sound and promising as this startup appears you will want to give it your full attention.